Luxembourg in the starting-blocks for AIFMD implementation
The draft bill 6318 (the Bill) modifying the Luxembourg law of 13 February 2007 on Specialized Investment Funds (SIF) was filed with the Luxembourg Parliament on 12 August 2011.
Even though the Bill is not officially an implementation measure of the Alternative Investment Fund Management Directive (AIFMD), it aims at preparing the Luxembourg legal and regulatory framework for the new AIFMD landscape. In particular, SIFs will be required, should the Bill be passed, to:
- implement risk management process,
- implement procedures aiming at avoiding conflicts of interest.
With the same view, the Bill aims at significantly regulating entities/persons appointed as asset managers of a SIF. In this respect, the Bill introduces numerous new obligations and requirements as briefly enumerated below:
- Possibility to delegate the asset management only to a person/entity approved and supervised by the CSSF. Should the asset manager not be approved and supervised by the CSSF, it should be approved and supervised by a foreign authority with which cooperation agreements are in place,
- Notification to the CSSF and communication to the CSSF of the identity of the persons responsible for the management of the assets of a SIF,
- Definition of the rules governing the delegation of the asset management by a SIF so as to enable the governing body of a SIF to properly control the asset manager,
- Obligation for the governing body of a SIF to run proper due diligence on the asset manager,
- Mention of the delegation of the asset management in the offering documentation.
Finally, the Luxembourg Government took the opportunity of this Bill to introduce the new measures below:
- Compulsory approval by the CSSF prior to the launch of a SIF,
- Possibility to have the articles of incorporation of a SIF drafted in French, German or English,
- Requirement for the portfolio of a SIF to be actively managed. This measure aims at avoiding the misuse of SIFs for pure passive wealth management structuring but should not affect private equity nor real estate long term investments.
For More information Contact us:
SGG Fund Services
Registrar & Transfer Agent – Central Administration Agent
Net Asset Value Calculation Agent
+352 - 46 61 11 3401
arnaud.bon@sgg.lu
